Volume 11, Issue 4

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October - December 2009 · Published: Jan 2010

Regional Overview

October — December 2009

They’re Baaaack!

The US is back in Asia! This was the central theme of President Obama’s major Asia policy speech, delivered in Tokyo on the first leg of a four-country swing through Asia this past quarter. North Korean “Dear Leader” Kim Jong-il also hinted that Pyongyang might come back to the Six-Party Talks after a visit to the North Korean capital by Special Envoy Stephen Bosworth. Kim did not meet Bosworth but he did meet with Chinese Premier Wen Jiabao at the beginning of the quarter, signaling that he too was back from the death bed many had placed him in. Washington’s commitment to multilateral cooperation was renewed at the Asia Pacific Economic Cooperation (APEC) leaders meeting. Obama also followed through on the Bush administration’s earlier unrealized plan to convene the first-ever full ASEAN-US summit. Historic rivalries within Southeast Asia returned to the front-burner as Thailand and Cambodia turned up the heat in a very un-ASEAN way. Asia’s economies also appear to be returning from the dead while Australian Prime Minister Kevin Rudd’s proposal for a new Asia-Pacific Community refuses to die, despite an apparent lack of enthusiasm within and beyond ASEAN.

In the last quarter of 2009, the US-Japan alliance entered one of the greatest periods of uncertainty in recent memory.  Many of the populist policy proposals of the Democratic Party of Japan (DPJ) fell by the wayside as the party settled into power after trouncing the Liberal Democratic Party (LDP) in August elections.  Fiscal and political realities forced Prime Minister Hatoyama Yukio to shelve several key domestic pledges.  On the foreign policy front, the new government announced Japan would terminate a naval refueling mission supporting coalition operations in Afghanistan, as it had pledged during the campaign, but unveiled a $5 billion aid package focused on infrastructure and vocational training.  President Obama and Prime Minister Hatoyama met in Tokyo in November to discuss Afghanistan and several other issues including North Korea, nonproliferation, and climate change.  However, the summitry did little to conceal Washington’s frustration with Tokyo’s conflicting messages about the US-Japan alliance.  Obama came away from the summit believing that Hatoyama had promised to implement the current bilateral agreement on realigning bases in Okinawa; instead, Hatoyama announced that he would make a decision on how to proceed in the late spring after exploring other options that the Obama administration and Hatoyama’s own ministers of foreign affairs and defense had already dismissed as unrealistic.  The Obama administration was also chagrined to see Hatoyama pledge to other Asian leaders that Japan would move forward with an ill-defined “East Asia Community” in order to reduce Tokyo’s “dependence” on the United States.  Public opinion polls in Japan revealed dissatisfaction with Hatoyama’s approach to the Okinawa issue and his leadership skills overall, while opinions toward the US hit their highest mark ever. Nevertheless, the difficulties managing the alliance cast a shadow over bilateral discussions on how to mark the 50th anniversary of the bilateral security treaty in 2010.

President Obama’s first-ever trip to China was the main attraction of the fourth quarter. In addition to meeting Chinese leaders, Obama held a town hall-style assembly with Chinese students in Shanghai. The two sides signed a joint statement, the first in 12 years, which highlighted the depth and breadth of the relationship and promised greater cooperation. Nevertheless, the US media mostly faulted the president for not making sufficiently concrete progress on a number of problems. The Copenhagen climate talks garnered much attention in December. As the two largest emitters of CO2, negotiations between China and the US not only occupied the meeting’s spotlight, but also ultimately decided its outcome. Trade friction continued to intensify with both countries launching new investigations and imposing duties on several products. The bilateral military relationship took a step forward with the visit to the US by Xu Caihou, vice chairman of China’s powerful Central Military Commission.

US - Korea

October — December 2009

The New Old Reliable

The final quarter of 2009 included a number of significant developments in US-Korea ties. President Barack Obama made his first trip to Seoul in November, and Special Envoy for North Korea Policy Stephen Bosworth traveled to Pyongyang in December.  The summit between Presidents Obama and Lee Myung-bak marked the continuation of an historical high in relations between the two countries.  On issues affecting the alliance, Obama and Lee found common ground on North Korea, while they inched forward with the Korea-US free trade agreement.  Meanwhile, Bosworth’s three days of talks with North Korean officials brought the most encouraging signs of a return to the six-party process since talks broke down at the end of 2008.  The Obama administration is faring well on the Korean Peninsula, even as relations with other major powers of the region become more complicated.  Those accompanying Obama on his trip to Asia informally acknowledged that Korea was the “best stop” on the trip and sensed a personal connection between the two leaders.

US - Russia

October — December 2009

START-over for the New Year

The last quarter of 2009 proved to be a quiet one for US-Russia relations.  Although there were no major bilateral rifts, several issues continue to fester, including the impasse over the Iranian nuclear program.  The biggest disappointment, however, may have been the failure to reach an agreement on the replacement for the Strategic Arms Reduction Treaty (START) that expired on Dec. 5.  Negotiations are set to resume in January, but end-of-year remarks by Prime Minister Vladimir Putin about the dangers of the US ballistic missile defense system threaten to throw a wrench into the discussions.  Meanwhile, the long-awaited East Siberian oil pipeline destined for Asian markets has finally come on line.

High-level US efforts to convince Burma’s military government to open its political system to the democratic opposition and release political prisoners prior to scheduled 2010 elections accelerated this quarter.  President Obama, Secretary of State Clinton, and Assistant Secretary of State Campbell all weighed in during meetings in Burma and at the first ASEAN-US summit in Singapore after the annual APEC leaders meeting.  The ASEAN states welcomed the first US summit with all 10 members. Secretary General Surin Pitsuwan noted that President Obama’s praise for ASEAN’s key role in Asian international organizations debunked claims by some that ASEAN is no longer the centerpiece of the region’s architecture.  Singapore’s prime minister insisted that the US continues to be Asia’s “indispensable” player despite the rise of China and India.  In the Philippines, the Visiting Forces Agreement continues to be a political football in domestic Philippine politics as President Arroyo’s political opponents claim that the US military violates the Philippine constitution by engaging in combat – an allegation denied by both the US embassy and the Philippine government.  On a tip from the US, Thai authorities detained a cargo aircraft coming from North Korea with a load of sophisticated weapons in violation of a UN Security Council Resolution.

The last quarter of 2009 featured high-level Chinese leadership diplomacy with individual Southeast Asian countries, ASEAN, and Asian regional multilateral groups. Salient meetings involved the ASEAN Plus 1 and Asian leadership summits in Thailand in October, a presidential visit to Malaysia and Singapore, including the APEC leaders meeting in Singapore in November, and high-level visits to Australia in late October, and Myanmar and Cambodia in December. Chinese official media commentary showed some concern over recently heightened US and Japanese diplomatic activism in the region. The South China Sea disputes and military tensions along the China-Myanmar border were much less prominent than earlier in the year.

China - Taiwan

October — December 2009

Moving ahead Slowly

Taipei and Beijing resumed progress on economic issues by completing the Memorandums of Understanding (MOUs) on cooperation in regulating the financial sector and signing three technical agreements at the fourth round of SEF-ARATS talks.   Informal talks concerning an Economic Cooperation Framework Agreement (ECFA) continued but no date for starting formal negotiation has been announced.  While the pace of progress is now slow largely because reaching compromises on substantive economic issues has proven to be time-consuming, these agreements further integrate the two economies.  Taipei has continued to resist pressure from Beijing to address political issues about which opinion in Taiwan remains deeply divided.  Cross-Strait trade has recovered quickly from the precipitous drop a year ago and should surpass its pre-recession peak in December.   Slow progress is likely to continue in the coming months.

North Korea - South Korea

October — December 2009

Mixed Signals

During the last quarter of 2009 relations between the two Koreas maintained the slight improvement seen since late August, when two senior Northern figures visited Seoul and met the hitherto excoriated President Lee Myung-bak. This easing is a relief compared to the first year and a half of Lee’s presidency, during which North-South ties went from bad to worse. Yet it is premature to suggest any substantial improvement – much less a return to the engagement of the “Sunshine” decade (1998-2007), which must now be consigned to history.  Rather, what we see is mixed signals from Pyongyang, and to some extent also from Seoul. Having got past initial hostilities, the two governments are now testing and sounding each other out. This is not happening in a vacuum, but in the context of two wider imponderables: whether Kim Jong-il will return to nuclear dialogue in any shape or form, plus the opaque and delicate process of installing his third son Kim Jong-eun as his anointed successor. A surprise currency redenomination in early December, rendering most North Koreans’ savings worthless and reportedly provoking protests, is a reminder that the North’s internal stability cannot be taken for granted – and a blow to those who still aver that the DPRK is at some level trying to change for the better.

The last quarter of 2009 raised hopes for developments in China’s relations with both Koreas.  Chinese Vice President Xi Jinping received head-of-state treatment during his mid-December visit to South Korea. In Seoul, Xi presented a series of proposals to further the China-ROK strategic cooperative partnership, including pressing for a free trade agreement.  President Lee Myung-bak and Premier Wen Jiabao held bilateral talks on Oct. 10 in Beijing on the sidelines of the China-ROK-Japan trilateral summit, which Lee used to promote his “grand bargain” on North Korean denuclearization.

There were also several exchanges between China and the DPRK. In early October, Premier Wen led a large delegation to Pyongyang and proposed a comprehensive set of deals with North Korea. As the first Chinese premier to visit Pyongyang in 18 years, Wen was warmly hosted by Kim Jong-il. Following Wen’s visit, the director of the United Front Department of the Workers’ Party of Korea (WPK) and Pyongyang’s official in charge of inter-Korean relations, Kim Yang-gon, made a five-day trip to China. President Hu Jintao reportedly extended a formal invitation to Kim Jong-il to visit China “at a convenient time” at his meeting with Choe Thae-bok, secretary of the WPK Central Committee and one of Kim’s closest aides, who led a WPK delegation to Beijing in late October.

Japan - China

October — December 2009

Gathering Momentum

A flurry of high-level political and diplomatic contacts marked the quarter.  The engagement culminated in the December visit of DPJ Secretary General Ozawa Ichiro to China and his meeting with President Hu Jintao followed by the visit of Vice President Xi Jinping to Japan and his audience with Emperor Akihito.  Both Japanese and Chinese political leaders repeatedly made clear their intentions to advance the bilateral relationship. While progress on issues related to joint development of resources in the East China Sea and resolution of the adulterated gyoza case remained noticeably lacking, public opinion polls suggested an upward trend in the way both Japanese and Chinese viewed each other and the bilateral relationship.

Japan - Korea

October — December 2009

Small Signs of Progress

Relations between Japan and the two Koreas were relatively uneventful in the final quarter of 2009. The new Hatoyama government quickly began to show more attention to its relations with its East Asian neighbors and hinted at a small change in priorities with respect to North Korea. South Korea and Japan said mostly all the right things, even while substantively it seemed fairly clear that they continued to have very different opinions about territorial and historical disputes. However, no real movement or dramatic changes came about during the quarter, setting the stage for 2010 – the 100th “anniversary” of Japan’s annexation of Korea.

The last month of 2009 was significant for petro-politics on the Eurasian continent. In mid-December, the 1,800 km Turkmenistan-Uzbekistan-Kazakhstan-China natural gas pipeline went into operation. It connects with the 4,500 km West-East trunk line inside China and has an annual capacity of 40 billion cubic meters. Two weeks later, Prime Minister Putin officially commissioned the first section (about 2,700 km from Taishet in eastern Siberia to Skovorodino in the Amur region) of the nearly 5,000 km Eastern Siberia-Pacific-Ocean (ESPO) oil pipeline to the newly built Kozmino oil port near Vladivostok, where the first batch of Siberian crude was being loaded on the 100,000-ton oil tanker Moscow University bound for Hong Kong. Thus, Moscow and Beijing significantly elevated their postures in the global game of energy diversification for both buyers and sellers. Both pipelines were built during the tenure of President-turned-Prime-Minister Putin. His October visit to China resulted in a dozen high-value commercial deals, but also reflected his 10-year legacy in shaping Russian-Chinese relations and their mutual perceptions.

India - East Asia

October — December 2009

Treading Water

India-US relations were characterized by a degree of ennui while India-East Asia relations were overshadowed by public tensions between China and India throughout much of the year. The Obama administration, preoccupied by multiple high-stakes domestic and foreign policy priorities, offered up two high-profile visits for New Delhi with Secretary of State Hillary Clinton going to India in July and Prime Minister Manmohan Singh coming to Washington in November as the first head of state visit. But the newly strengthened Congress-led government, which returned to power after the April-May national elections, remained wary of the Obama administration’s priorities and approaches toward a range of issues including its Afghanistan-Pakistan (AfPak) strategy, nuclear nonproliferation, and climate change, as it felt some nostalgia for the primacy of place and purpose offered to India by the bygone Bush administration. Meanwhile, in India’s ties with East Asia, even though New Delhi made diplomatic forays ranging from Mongolia to Papua New Guinea to the Pacific Islands Forum to Australia while sustaining its traditional relationships with Japan and ASEAN, the tense Beijing-New Delhi interaction over the decades-old border dispute was the focus of attention for most observers.

The twain did (and did not) meet between India-US and India-East Asia relations. Of particular note during the year was the joint US-China communiqué following President Obama’s visit to Beijing that referred to US-China cooperation on South Asia. To the Indians this had echoes of the Clinton administration when similar language was used after India’s nuclear tests and was highly objectionable then and even more so today given the progress in US-India relations and the absence of nuclear tests. For the US, thinking of South Asia in broader terms including AfPak, and cooperating with China accordingly is entirely reasonable – and not directed at India. Indians also noted that Secretary Clinton did not refer to India in her major speech on Asia before traveling to the region in February; a sign of the continuing US ambivalence (not to mention India’s) about New Delhi’s role in Asia.

Daily Digest

Reuters – China’s foreign minister calls Taiwan’s new president ‘disgraceful’

Chinese Foreign Minister Wang Yi called Taiwan’s newly-inaugurated President Lai Ching-te “disgraceful” on Tuesday, stepping up Beijing’s rhetoric just a day after he took office.

Reuters – New Taiwanese president calls on China to stop its threats

Taiwan President Lai Ching-te asked China on Monday to stop its military and political threats, saying in his inauguration speech that peace was the only choice and that Beijing had to respect the choice of the Taiwanese people.

The Diplomat – Philippines Calls for International Probe Into Environmental Damage at Disputed Shoal

The Philippines has accused Chinese fishermen of destroying the marine environment at Scarborough Shoal, a disputed feature controlled by China’s coast guard in the South China Sea, calling on Beijing to open the atoll to international security.

Reuters – China launches anti-dumping probe into EU, US, Japan, Taiwan plastics

China’s commerce ministry on Sunday launched an anti-dumping probe into POM copolymers, a type of engineering plastic, imported from the European Union, United States, Japan and Taiwan.

Reuters – New Taiwanese president calls on China to stop its threats

Taiwan President Lai Ching-te asked China on Monday to stop its military and political threats, saying in his inauguration speech that peace was the only choice and that Beijing had to respect the choice of the Taiwanese people.

Reuters – Philippines urges China to allow scrutiny of disputed South China Sea shoal

The Philippines challenged China on Monday to open Scarborough Shoal to international scrutiny after it accused Beijing of destroying the shoal’s marine environment.